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James Miller v. Hanover Insurance Company
Docket No. INS-07-2016, Decision Issued March 15, 2007

The insured requested a hearing following receipt of a notice of cancellation of dwelling fire insurance coverage citing nonpayment of premium as the reason for cancellation. At hearing, the company testified regarding the payment history of the policy. The insured maintained that he had always received billing notices late, if at all, and that he had notified the agency that the zip code used was wrong. He stated that he did not realize until receiving this cancellation notice that the zip code was still incorrect.

Held: For the insured. Under 24-A M.R.S.A. § 3049(1), an insurer may cancel a policy for nonpayment of premium. Section 3050 states that a cancellation notice for nonpayment of premium is not effective unless received by the named insured at least 10 days prior to the effective date of the cancellation, and a postal service certificate of mailing to the named insured at the insured’s last known address is conclusive proof of receipt on the fifth calendar day after mailing.

The insured testified that he notified the agent previously of the problem with the address and he believed that the error had been corrected. Pursuant to section 2422, information known by the agent is known to the company, and therefore, the company through its agent knew that the address was incorrect. The address to which the company mailed the notice of cancellation was not the last known address of the named insured. Thus, this postal certificate of mailing is not conclusive proof of the insured’s receipt of the notice on the fifth calendar day after mailing. The insured testified that he received the notice after the cancellation date. Accordingly, the company did not provide the required 10 days notice prior to the cancellation effective date, and the cancellation notice is ineffective.